Jackson50 on 22 September 2008
| Jandre002 said: I really dont know how much we can blame the government for this. Once they saw these subprime loans going out they really should have stepped in, but I don't think we can blame Bush for this so much (we can blame him for everything else.) It IS his fault that gas prices went up. It is his fault that Americans began to panic because of "terrorism", which undoubtedly affects how consumers act in the market. But this right now, I think its investment banks fault. Investing billions in assets backed by consumers will horrible to no credit is stupid. Sure the returns are high but when they don't pay, your screwed. It only took a slight economic slowdown to trigger the domino effect and thats exactly what happened. |
You are misplacing the blame. The blame should not be placed on the banks, the government nor the people borrowing the money. No, their actions were the direct result of the Federal Reserve's actions. Why did the banks loan money to people who could not afford it? Because interest rates were shockingly low from about 2001-2004. The Fed created this housing bubble...and then it popped. Government intervention would have done nothing to stop this. After the Fed had done its damage in that three year period...the *pop* was inevitable.
